On February 6, 2019, the Department of Health and Human Services (HHS) published a Proposed Rule modifying the Anti-Kickback Statute safe harbor protection with the aim of lowering prescription pharmaceutical product prices and out-of-pocket costs for (primarily Medicare Part D and Medicaid Managed Care Plan) consumers. With the Proposed Rule, HHS hopes to encourage medication manufacturers to pass discounts directly to consumers and develop a transparent framework for the prescription pharmaceutical product market. A more thorough discussion of the Proposed Rule may be found here.

]]>https://www.triagehealthlawblog.com/anti-kickback-statute-2/hhs-proposes-changes-to-the-discount-safe-harbor-framework-to-realign-incentives-and-put-downward-pressure-on-drug-prices/feed/0john.wyand@squirepb.com, robert.nauman@squirepb.com, kinal.patel@squirepb.comPharmacy Benefit Managers Are Not Subject to the Any Willing Provider Laws in GA, MS, or NC, says Eighth Circuithttps://www.triagehealthlawblog.com/8th-circuit/pharmacy-benefit-managers-are-not-subject-to-the-any-willing-provider-laws-in-ga-ms-or-nc-says-eighth-circuit/
https://www.triagehealthlawblog.com/8th-circuit/pharmacy-benefit-managers-are-not-subject-to-the-any-willing-provider-laws-in-ga-ms-or-nc-says-eighth-circuit/#respondThu, 17 Jan 2019 21:39:46 +0000https://www.triagehealthlawblog.com/?p=3583Continue Reading]]>The Eighth Circuit has recently reviewed whether a pharmacy benefit manager (”PBM”) is a “health benefit plan” within the meaning of the state statutes in Mississippi, North Carolina, and Georgia such that a pharmacy may bring a claim to enforce the any willing provider laws against PBMs.

Many states have enacted some version of any willing provider laws, which generally require healthcare plans to accept any qualified provider willing to accept the plans’ terms and conditions. Some of these laws, such as Colorado’s § 10-16-122, C.R.S., specifically refer to PBMs. Others, such as Mississippi’s Miss. Code. Ann. § 83-9-6, are much more ambiguous. For example, Miss. Code. Ann. § 83-9-6 applies “to all health benefit plans providing pharmaceutical services benefits, including prescription drugs…” without specifically mentioning PBMs.

A pharmacy sued a PBM in the Eastern District of Missouri, bringing claims sounding in contract, promissory estoppel, federal antitrust, and violations of Georgia, Mississippi, and North Carolina state any willing provider laws after the PBM terminated its contract with the pharmacy. In its appellate briefing, the pharmacy argued that the District Court should have afforded it an opportunity to prove that a PBM falls within the purview of the Mississippi, North Carolina, and Georgia any willing provider laws, even in the absence of binding authority holding that these statutes apply to PBMs. The Eighth Circuit concisely rejected this invitation with a single sentence: the pharmacy “has pointed to no case law that suggests that these laws apply to PBMs, and we decline to extend the reach of these laws to PBMs as a matter of first impression.” The Eighth Circuit’s holding thus rejected the pharmacy’s claims under these statutes.

Health care entities reviewing state any willing provider laws should perform careful state-specific research as to the applicability of those laws. Even more generally, the Eighth Circuit opinion cautions litigants against framing claims enforcing state healthcare statutes absent authority supporting the statutes’ application.

]]>https://www.triagehealthlawblog.com/bankruptcy/squire-patton-boggs-attorneys-publish-practical-law-practice-note-on-state-legalized-marijuana-businesses-and-access-to-the-bankruptcy-code/feed/0john.wyand@squirepb.comRight to Try Investigational Drugs Signed Into Lawhttps://www.triagehealthlawblog.com/department-of-health-and-human-services/right-to-try-investigational-drugs-signed-into-law/
https://www.triagehealthlawblog.com/department-of-health-and-human-services/right-to-try-investigational-drugs-signed-into-law/#respondMon, 18 Jun 2018 13:11:02 +0000https://www.triagehealthlawblog.com/?p=3402Continue Reading]]>Right to Try Investigational Drugs Signed Into Law

On May 30, 2018, S. 204, the Trickett Wendler, Frank Mongiello, Jordan McLinn, and Matthew Bellina Right to Try Act of 2017 (Pub. L. No. 115-176, “Right to Try Act”) was signed into law. The Right to Try Act amends the Federal Food, Drug, and Cosmetic Act (the “FD&C Act”) to establish national standards and rules by which certain investigational drugs may be provided to terminally ill patients. Under the Right to Try Act, a patient diagnosed with a life-threatening disease or condition, who has exhausted approved treatment options and is unable to participate in clinical trials involving certain investigational drugs, may seek the opportunity to drug treatments that are not approved by the U.S. Food & Drug Administration (FDA).

The Right to Try Act exempts the provision of eligible investigational drugs to eligible patients from a number of requirements and restrictions under the FD&C Act and other laws. The manufacturer or sponsor of an eligible investigational drug must report annually to the FDA on any use of drugs dispensed under the Right to Try Act. The FDA will post an annual summary report of such use on its website.

The Right to Try Act incorporates the regulatory definitions of “life-threatening” diseases that are: (1) a disease or condition where the likelihood of death is high unless the course of the disease is interrupted, and (2) a disease or condition with potentially fatal outcomes, where the end of clinical trial analysis is survival.

Under the new law, a sponsor or drug manufacturer may only recover the direct costs of making its investigational drug available. Direct costs are costs that can be specifically and exclusively attributed to providing the drug for the investigational use under the Right to Try Act. Direct costs include costs per unit to manufacture the drug (e.g., raw materials, labor, and non-reusable supplies and equipment used to manufacture the quantity of drug needed for the use for which charging is authorized) or costs to acquire the drug from another manufacturing source, and direct costs to ship and handle (e.g., store) the drug. Direct costs exclude costs incurred primarily to produce the drug for commercial sale (e.g., costs for facilities and equipment used to manufacture the supply of investigational drug, but that are primarily intended to produce large quantities of drug for eventual commercial sale) and research and development, administrative, labor, or other costs that would be incurred even if the clinical trial or treatment use for which charging is authorized did not occur.

The FDA announced that it stands “ready to implement this legislation in a way that achieves Congress’ intent to promote access and protect patients. The FDA is dedicated to achieving the goals that Congress set forth in this legislation, so that patients facing terminal conditions have an additional avenue to access promising investigational medicines.”

]]>https://www.triagehealthlawblog.com/department-of-health-and-human-services/right-to-try-investigational-drugs-signed-into-law/feed/0john.wyand@squirepb.com, meg.gilley@squirepb.comUK Competition Appeal Tribunal Quashes Fines in First Pure Excessive Pricing Casehttps://www.triagehealthlawblog.com/pharmaceutical/uk-competition-appeal-tribunal-quashes-fines-in-first-pure-excessive-pricing-case/
https://www.triagehealthlawblog.com/pharmaceutical/uk-competition-appeal-tribunal-quashes-fines-in-first-pure-excessive-pricing-case/#respondThu, 14 Jun 2018 18:45:08 +0000https://www.triagehealthlawblog.com/?p=3392Continue Reading]]>On 7 June, the UK’s Competition Appeal Tribunal (CAT) annulled in part a decision by the UK’s Competition and Markets Authority (CMA) imposing fines of nearly £90 million on two pharma companies, Pfizer and Flynn, for charging excessive prices for the anti-epileptic drug, phenytoin sodium capsules. The case is notable as it marks the first time that the CAT has ruled on a pure excessive pricing case in the pharma sector.

In its decision, the CMA had found that both Pfizer and Flynn held a dominant position in their respective markets and that each company had abused that position by significantly raising the prices of phenytoin sodium capsules from £2.83 to £67.50 – corresponding to a price increase of 2,600%. The price increase followed from Flynn’s decision in 2012 to genericise the drug with a view to effectively removing it from the sectoral pricing regulation that applies to branded medicines.

Pfizer and Flynn appealed the CMA’s decision before the CAT. Although the Tribunal upheld the CMA’s findings on market definition and dominance, it found that the CMA misapplied the two-limb test for excessive pricing established by the European Court of Justice in its seminal judgment in United Brands. That test involves assessing (i) whether the price is excessive by comparison to the cost of production (the ‘excessive’ limb); and if so, (ii) whether a price is unfair either in itself or when compared to competing products (the ‘unfair’ limb).

As regards the ‘excessive’ limb, the Tribunal held that the CMA was wrong to restrict its assessment to a cost plus[1] approach, to the exclusion of other methodologies and the evidence more widely available. In doing so, the CMA focused its analysis on “a theoretical concept of idealised or near perfect competition, than to the real world”. The correct approach, according to the Tribunal, was to identify a benchmark price or price range, which would have applied in conditions of “normal and sufficiently effective competition”.

In respect of the ‘unfair’ limb, the CAT found that the CMA wrongly examined only if the Pfizer/Flynn price was unfair in itself, thereby failing to adequately assess the possible impact of phenytoin tablets (the price of which was 25% higher than that of capsules), as meaningful comparators.

In light of the misapplication of the test on excessive pricing, the CAT concluded that the CMA’s findings on abuse of dominance were defective and set aside that part of the decision. In terms of remedy, the Tribunal has indicated that its provisional view is to remit the case back to the CMA for further consideration, noting that the correct application of the test on excessive pricing will require detailed examination of the facts, which the CMA is better placed to carry out.

Cases of pure excessive pricing are very rare in competition law and notoriously difficult to establish. The Tribunal’s judgment illustrates the practical issues that competition authorities face when intervening in such cases, notably the lack of a single methodology to determine that a price/profit margin is excessive and the inherent complexity of establishing an appropriate benchmark price. The structure and specificities of the pharmaceutical market, in particular national pricing regulations, compound the complexity of the legal analysis and increase the likelihood of errors.

Despite these difficulties, competition authorities across the EU, including the European Commission, have been in recent years actively pursuing excessive pricing cases in the pharma sector, in particular cases involving significant prices increases.

Shortly after the Pfizer/Flynn decision, the CMA issued a Statement of Objections to Actavis UK in the context of its investigation into excessive pricing of hydrocortisone tablets – involving price increases up to 12,000%. The authority is also currently investigating alleged excessive pricing with respect to liothyronine tablets, a drug used to treat hypothyroidism.

In 2016, the Italian competition authority imposed a €5 million fine on Aspen for charging excessive prices (through increases up to 1,500%) for a suite of off-patent cancer drugs; the fine has been recently upheld by the Italian Administration Court. The company is currently under investigation by the European Commission for having allegedly implemented excessive prices in several EU Member States on five cancer drugs and for having threatened to withdraw those drugs in some other EU Member States.

Earlier this year, the Danish competition authority found that CD Pharma abused its dominant position by charging excessive prices for the drug Syntocinon, an off-patent drug used by public hospitals in Denmark in connection with childbirth. The authority found that in 2014 CD Pharma increased the price on Syntocinon from €6 to €127, corresponding to a price increase of 2,000%. The case has been submitted to the Danish State Prosecutor for Serious Economic and International Crime, who will be deciding on prosecution and financial penalties.

In addition, the French competition authority has recently launched a sector-wide investigation into healthcare, targeting specifically the distribution of pharmaceuticals and their price regulation mechanism, while the president of the Dutch competition authority has published a working paper regarding enforcement of competition law in the pharma sector, where it is noted that “excessive pricing cases addressing patented products are bound to follow”.

These developments highlight that cases of excessive pricing will continue to remain high on the agenda of competition authorities across the EU in the coming years and suggest that the EU could be moving towards establishing a comprehensive framework for pursuing excessive pricing cases – the CAT’s judgment was the first step in that direction.

[1] In assessing the ‘plus’ element, the CMA considered that an ROS (return on sales) of 6% was a reasonable rate of return, as the maximum permissible ROS for a portfolio of branded medicines under UK pharma pricing regulation. This was one of the most controversial elements of the CMA’s decision, raising doubts about the appropriateness and probative value of a regulatory price cap for a portfolio of products as an indicator of a reasonable rate of return for a single generic product.

On Thursday, May 17, the House Energy and Commerce Committee (E&C) cleared 32 additional opioid-related measures during its second markup on the issue. In total, E&C has now advanced 57 bills to combat the opioid overdose crisis.

While most measures were easily approved on a bipartisan basis, committee members disagreed over a number of bills related to expanding buprenorphine prescribing authorities, lifting a decades old ban on Medicaid payments for mental health and substance use disorder (SUD) residential treatment facilities with more than 16 beds, and permitting physicians to more easily access and share medical records related to patients’ SUD therapies.

During the hearing, E&C Chairman Greg Walden (R-OR) suggested that Majority Leader Kevin McCarthy (R-CA) has committed to reserving House floor time in June to consider a comprehensive legislative package.

On Friday, May 11, 2018, President Trump vowed to fix “the injustice of high drug prices” by announcing the “Blueprint to Lower Drug Prices” (the Blueprint) to address the following challenges:

Excessively high drug prices

Seniors and government programs overpaying for drugs

High out-of-pocket costs for consumers

Lack of transparency in drug pricing

Free-riding by foreign nations as to US investment in innovation

This piece provides analysis of the Blueprint and its proposed reforms. Read PDF.

]]>https://www.triagehealthlawblog.com/340b-program/the-new-federal-blueprint-to-lower-drug-prices/feed/0john.wyand@squirepb.com, doug.anderson@squirepb.com, john.bunch@squirepb.comOhio Expands Prescriptive Authority for Certain Advanced Practice Registered Nurseshttps://www.triagehealthlawblog.com/hospitals/ohio-expands-prescriptive-authority-for-certain-advanced-practice-registered-nurses/
https://www.triagehealthlawblog.com/hospitals/ohio-expands-prescriptive-authority-for-certain-advanced-practice-registered-nurses/#respondFri, 26 May 2017 19:25:56 +0000http://www.triagehealthlawblog.com/?p=2932Continue Reading]]>On May 17, the Ohio Board of Nursing (the Board) adopted a new formulary which expands the prescriptive authority for certain of Ohio’s advanced practice registered nurses (APRNs). Specifically, this new “exclusionary” formulary applies to Ohio’s certified nurse practitioners, clinical nurse specialists and certified nurse midwives. The new formulary was adopted pursuant to Ohio’s House Bill 216 (HB 216), which amended ORC § 4723.50 to require, in part, that the Board adopt a new exclusionary formulary permitting APRNs to prescribe any controlled substances except as prohibited by federal or state law, and except for drugs or devices to perform or induce abortions. The exclusionary formulary also provides that the APRN’s prescriptive authority shall not exceed that of the APRN’s collaborating physician or podiatrist.

This new exclusionary formulary replaces Ohio’s previous APRN formulary which limited prescriptive authority to only those drugs specifically identified therein. By permitting APRNs to potentially prescribe any controlled substance not otherwise prohibited by law, the new formulary appears to expand the prescriptive authority of Ohio’s APRNs.

Ohio still requires APRNs to enter into “standard care agreements” (SCAs) with collaborating physicians and podiatrists, and these SCAs may contain additional restrictions on an APRN’s authority. Given the exclusionary formulary’s recent adoption, providers with existing SCAs should review them and, if necessary, make appropriate changes.

In connection with HB 216’s changes to Ohio’s nursing statutes, the Board is currently considering a new regulation to further clarify APRN prescriptive authority. The proposed regulation addresses HB216’s formulary standards and imposes additional APRN practice standards regarding prescription of opioids for the treatment of acute pain. Comments to the proposed regulation will be considered at a public hearing on July 26th. Assuming the regulation is adopted, it is expected to become effective on or around August 31.

]]>https://www.triagehealthlawblog.com/hospitals/ohio-expands-prescriptive-authority-for-certain-advanced-practice-registered-nurses/feed/0robert.nauman@squirepb.comLawyer Misconduct Dooms FCA Suithttps://www.triagehealthlawblog.com/false-claims-act/lawyer-misconduct-dooms-fca-suit/
https://www.triagehealthlawblog.com/false-claims-act/lawyer-misconduct-dooms-fca-suit/#respondMon, 08 May 2017 21:48:51 +0000http://www.triagehealthlawblog.com/?p=2924Continue Reading]]>A fraudulent survey of doctors sponsored by attorneys for a qui tam relator doomed a False Claims Act (FCA) complaint against a pharmaceutical company. In a forceful opinion, United States District Judge Dennis Saylor IV, District of Massachusetts, found violation of ethical rules, excised more than 100 paragraphs of the complaint as a sanction, and dismissed the truncated complaint for failure to meet the particularity standards required for an FCA complaint under Fed. R. Civ. P. 9(b).

When the government declined to intervene in an FCA suit alleging off label marketing, attorneys for the relator filed a second amended complaint based in large part on the results of a purported research study about prescribing practices for the drug. The survey, conducted via internet and telephone, by a doctor hired by the attorneys, was disclosed during discovery. The survey falsely represented that the resulting data would be used only for research purposes and would be kept confidential. Instead, the attorneys included data in the complaint such as names and addresses of 36 doctors as well as some information about their practices and some of their patients.Even though the survey was conducted by a doctor, the court held the attorneys responsible because “the investigation was conducted under the direction of attorneys.” Although the study appeared to be for medical research, the court found the actual purpose was to obtain and use otherwise confidential information in litigation. “There is no dispute” that the investigative scheme devised by the attorneys and their hired doctor “involved an elaborate series of falsehoods, misrepresentations, and deceptive conduct.” Further, the court found the misconduct material because at least two doctors submitted declarations that they would not have not participated had they known the truth.

The court rejected the attorneys’ argument that an investigative exception applied by distinguishing the kind of deception permitted when testers are used in discrimination litigation. The kind of information obtained by a tester from a prospective landlord, employer, or purchaser would be available to any member of the public whereas information in this matter was obtained by intruding into the physician-patient relationship. Further, testers are used against suspected wrongdoers whereas the doctors were not under suspicion. Although there is “no bright line” for the investigative exception, the fraudulent survey went too far.

The court found sanctions were appropriate under Massachusetts Rules of Professional Conduct 4.1 (a) and 8.4(c). In addition, the court pointed out that the FCA is designed not only to root out fraud but also to “discourage opportunistic plaintiffs.” As a remedy for the misconduct the court decided to strike fraudulently obtained information from the complaint, analogizing to the practice in criminal matters when fraudulent information is stricken the application for a search warrant. After removing more than 100 paragraphs, the court found the complaint should be dismissed because it failed to meet the particularity requirements required in order to proceed with an FCA complaint.